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About Exeter 1031 Exchange
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Overview of the Title Holding Trust for California Real Property Click here to view our upcoming Title Holding Trust seminars. What is a Title Holding Trust? The Title Holding Trust, often referred to as a land trust, holding trust or blind trust, is a simple and inexpensive method for holding legal title to California real estate or personal property. The Title Holding Trust is a fully revocable grantor trust (living trust) designed and written specifically to acquire, hold and ultimately dispose of California real estate or personal property on a confidential or private basis. Its roots come from the Illinois Land Trust long used to hold title to real property in the State of Illinois. There are many reasons for, and benefits of, acquiring and holding title to property in a Title Holding Trust. The most common include the need or desire to acquire and hold legal title to real estate or personal property in a confidential or private manner in order to keep the Beneficiary's (owner's) name out of the public records. Exeter Fiduciary Services, LLC, as Trustee of the Title Holding Trust, acquires and holds legal and equitable title to the California real property or personal property pursuant to the terms of an unrecorded Title Holding Trust Agreement. Who Can Set-up a Title Holding Trust? The Title Holding Trust can be established by an individual, a group of individuals, a general partnership, a limited partnership, another trust, another trustee or trust services provider such as an out-of-state trust company, a limited liability company, a corporation, or any other type of business entity. The person or entity that sets-up the Title Holding Trust is called the Trustor, Grantor or Settlor ("Trustor"). Who Serves as Trustee of the Title Holding Trust? Exeter Fiduciary Services, LLC is named or appointed as Trustee of the Title Holding Trust under the terms of the Title Holding Trust Agreement. Exeter Fiduciary Services, LLC merely serves as Trustee of the Title Holding Trust and has no authority to act without specific written authorization and direction from the Beneficiary(ies) of the trust. Exeter Fiduciary Services, LLC Exeter Fiduciary Services, LLC is licensed by the California Department of Consumer Affairs' Professional Fiduciaries Bureau as a private fiduciary or private trustee. Exeter Fiduciary Services, LLC provides specialty fiduciary products and services to real estate investors and property owners throughout the State of California, and is a wholly-owned subsidiary of The Exeter Group, LLC. Who Owns the Title Holding Trust? The Beneficiary(ies) own the Title Holding Trust. All ownership rights, often referred to as the benefits and burdens of ownership, are retained by the Beneficiary(ies) of the Title Holding Trust. The Beneficiary(ies) retain the power of direction over the trust unless they choose to delegate the power of direction to another individual or entity. Who Owns the Real Estate or Personal Property? Exeter Fiduciary Services, LLC serves as Trustee of the Title Holding Trust and owns the property under its name in its fiduciary capacity as Trustee of the trust. Public records, including the County Recorders', County Assessors' and County Tax Collectors' public files and records, would reflect the legal title and ownership of the real estate or personal property as follows:
The Beneficiary(ies) of the Title Holding Trust is not reflected on any public record, and the Beneficiary's information is not disclosed to any party unless authorized by the Beneficiary, the Trust Agreement, or required under law or by court order. Power of Direction The Beneficiary(ies) retain the power of direction over the trust unless they choose to delegate the power of direction to another individual or entity. The Trustee merely holds legal and equitable title to the California real property or personal property subject to the direction of the Beneficiary(ies). How Does the Title Holding Trust Work? The Trustor enters into a standardized Title Holding Trust Agreement with Exeter Fiduciary Services, LLC. The Trustor appoints or names Exeter Fiduciary Services, LLC as Trustee of the trust, designates one or more Beneficiaries (owners) of the trust and can also appoint or name one s €† €¢ ÐxÅtciaries under the trust. The initial Beneficiary is generally the Trustor and the Successor Beneficiaries are generally the Trustor's children. The Beneficiary(ies) of the Title Holding Trust retain complete control over the real estate or personal property held in the trust. They manage the property or retain agents to manage the property on their behalf. They collect and distribute any income and pay any and all expenses. They insure, develop, finance, lease or sell the real estate as they see fit. The trust may be modified, updated or terminated at anytime. Additional California real estate or personal property can be added to the trust at anytime. The Trustee executes grant deeds, promissory notes, deeds of trust, leases and otherwise deals with the property held in the trust only upon specific written authorization and direction from the Beneficiary(ies) of the trust. When title to real estate is held in a Title Holding Trust, courts have held that the beneficial interest(s) in the trust is personal property. This beneficial interest includes the right to receive any income and any proceeds from the sale or mortgage of the property. The Beneficiary(ies) reserve the right to live on or otherwise possess and use the real estate. Their beneficial interest in the trust, as personal property, can be easily assigned to another party without the need to prepare, sign, notarize and record a grant deed. When Should the Title Holding Trust be Set-up? The most effective way to take advantage of the benefits of the Title Holding Trust, especially when confidentiality or privacy of ownership is a concern, is to have the trust take title to the real estate or personal property when it is first acquired. This way the Beneficiary(ies) never appears on any public record. However, the Title Holding Trust can be set-up at any point in time. What the Title Holding Trust Does Not Do Title Holding Trusts provide many benefits to real estate investors and property owners. However, the Title Holding Trust will not get around any kind of tax that would otherwise be due and payable and it will not get around the due on sale clause contained in promissory notes secured by the property if and when 100% of the beneficial interest is transferred and the current beneficiary no longer has an interest in the Title Holding Trust. |
